G/SCM/N/343/KOR  
 
22 July 2019  
(19-4829) Page: 1/24 
Committee on Subsidies and Countervailing Measures  Original: English  
 
SUBSIDIES  
NEW AND FULL NOTIFIC ATION PURSUANT TO AR TICLE XVI:1  
OF THE GATT 1994 AND  ARTICLE 25 OF THE A GREEMENT  
ON SUBSIDIES AND COU NTERVAILING MEASURES  
REPUBLIC OF KOREA 
The following communication, dated 30 June 2019, is being circulated at the request of the 
Republic  of Korea . 
 
_______________  
 
 
The following notification is submitted for the purposes of transparency and without prejudice to the 
legal status and nature , including specificity, or effects of the notified programmes or measures 
under the ASCM and GATT 1994.  
 
  G/SCM/N/343/KOR  
 
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  Table of Contents  
I. AGRICULTURE  ................................ ................................ ................................ ........  3 
A. Foodgrain Management Programme  ................................ ................................ .............  3 
B. Variable Direct Payment for Rice  ................................ ................................ .................  4 
C. Support For Marketing And Promotion Of Agricultural And Livestock Products  ...................  4 
D. Support For Livestock Products  ................................ ................................ ...................  5 
II. FORESTRY  ................................ ................................ ................................ ..............  6 
A. Wood Utilization  Assistance Programme  ................................ ................................ ....... 6 
III. FISHERIES  ................................ ................................ ................................ .............  7 
A. Support for Management of Fisheries  ................................ ................................ ...........  7 
B. Support  for Aquaculture  Fishery  Development  ................................ ..............................  8 
C. Support for Vessel Decommissioning  ................................ ................................ ...........  9 
D. Support for Manage ment of Overseas Fisheries  ................................ ...........................  10 
E. Support  for Fisheries Resources Management  ................................ .............................  10 
F. Support  for Modernization of Old Distant -Fishing Vesse ls................................ ..............  11 
IV. ENERGY  INDUSTRY  ................................ ................................ ..............................  12 
A. Coal Industry Support  ................................ ................................ ..............................  12 
V. MANUFACTURING INDUST RY ................................ ................................ ...............  13 
A. Tariff Reduction on Aircraft Parts  ................................ ................................ ...............  13 
B. Support for Farm Machinery Manufacturing  ................................ ................................  14 
VI. ENVIRONMENT, RESEARC H AND DEVELOPMENT  ................................ ...................  15 
A. Environmental Improvement Loan Programme  ................................ ............................  15 
B. Support for R&D of Environmental Technology Development Projects  ............................  16 
C. Emission Reduction Project for In-use Diesel Vehicles  ................................ ..................  17 
D. Natural Gas Bus Supply Project  ................................ ................................ .................  18 
E. Hydrogen Fuel Cell Vehicle Distribution  ................................ ................................ ...... 19 
F. Loan Programme  for Recycling Industry Promotion  ................................ ......................  20 
G. Support for Telemetering Systems  ................................ ................................ ............  21 
H. Project on the Distribution of Low NOX Burners  ................................ ...........................  22 
I. Development of Core Technology in Industrial Fields  ................................ ...................  23 
J. Loan Programme for R&D of information and Communication Technology .......................  24 
 G/SCM/N/343/KOR  
 
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  I. AGRICULTURE  
A. Foodgrain Management Programme  
1. Title of the subsidy programme  
 
Foodgrain Management Programme.  
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objective and/or purpose of the subsidy  
 
To maintain and manage adequate food stocks of basic agro  products for food security.  
 
4. Background and authority for the subsidy  
 
Laws: 
 
− Foodgrain Management Act (Article 4) . 
− Agro-Fisheries Marketing and Price Stabilization Act (Article 13).  
 
Authority:  Ministry of Agriculture, Food and Rural Affairs.  
 
5. Form of the subsidy  
 
Grants and loans.  
 
6. Recipients and terms  
 
Grants : 
 
− Recipients : Farms that produce soybeans.  
− Content of subsidy:  The government purchases a certain volume from the producing farms . 
 
Loans : 
 
− Recipients:  The enterprises that purchase grains (with the exception of rice).  
− Content of subsidy: The government provides the enterprises with loans so that they can  
purchase gra ins (except for rice) from the producing farms . 
− Loan interest and duration: fixed rate (2.5~3.0%) or variable rate, 12 months . 
 
7. Amount of the subsidy  
(Unit: million KRW)  
* There has been no difference between the loan rate and the market rate since 2016. Therefore, the 
benefit of loan for grains in 2017 and 2018 are zero.  
 
8. Duration of the subsidy  
 
No fixed duration.  
 Item  Type  2017  2018  
Grains (except 
for rice)  Direct subsidy (a)   - - 
Loan 10,316  9,089  
Benefit of loan* (b)  - - 
Total(a+b)  - - 
Soybeans  Direct subsidy (a)  44,042  2,443  
Loan - - 
Benefit of loan * (b) - - 
Total (a+b)  44,042  2,443  G/SCM/N/343/KOR  
 
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  9. Trade effects of the subsidy  
 
It is estimated that the support of food  grain purchase has a minimal effect on trade because of 
Korea's low self -sufficiency rate.  
 
B. Variable Direct Payment for Ric e 
1. Title of the subsidy programme  
 
Variable Direct Payment for Rice.  
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objective and/or purpose of the subsidy  
 
To stabilize the income of rice producing farmers against the price fall of rice.  
 
4. Background and authority for the subsidy  
 
Law: Act on P reserving Agricultural Income  (Article 4). 
 
Authority : Ministry of Agriculture, Food and Rural Affairs . 
 
5. Form of th e subsidy  
 
Grants . 
 
6. Recipients and terms  
 
Recipients: The farmhouses whose use of agrochemicals and chemical fertilizers meets the standard, 
among those who produce rice by storing water in the rice fields that were used for rice farming 
from 1998 to 2000.  
 
Content of the subsidy:  Partial support for the difference between the target price and the actual 
average price during the harvesting season of the year.  
 
7. Amount of the subsidy  
(Unit: million KRW)  
Type  2017  2018  
Lump sum transfer   1,489,778  539,331  
 
8. Duration of the subsidy  
 
No fixed period.  
 
9. Trade effects of the subsidy  
 
There will be minimal effect on trade because the programme is being implemented in order to 
stabilize the income of domestic rice producing farmhouses.  
 
C. Support For Marketing And Promotion Of Agricultural And Livestock Products  
1. Title of the subsidy programme  
 
Support for Marketing and Promotion of Agricultural and Livestock Products.  
 
2. Period covered by the notification  
 
2017-2018.  G/SCM/N/343/KOR  
 
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  3. Policy objective and/or purpose of the subsidy  
 
To improve the quality and reduce the logistical costs of agro -livestock products (fruits, flowering 
plants, Kimchi, vegetables, ginseng and livestock products).  
 
4. Background and authority for the subsidy  
 
Law: Framework Act on Agriculture and Fisheries, Rural Community and Food Industry (Article  59). 
 
Authority:  Ministry of Agriculture, Food and Rural Affairs.  
 
5. Form of the subsidy  
 
Grants.  
 
6. Recipients and terms  
 
Recipients:  Exporters of fruits, flowering plants, Kimchi, vegetables, ginseng, and livestock products.  
 
Content of the subsidy: Partial support for costs in sorting, packaging, and transporting.  
 
7. Amount of the subsidy  
(Unit: million KRW)  
Type  2017  2018  
Lump sum transfer   39,608  40,810  
 
8. Duration of the subsidy  
 
No fixed time  period.  
 
9. Trade effects of the subsidy  
 
This programme supports the partial cost of packaging and transporting in compliance with Article 
9.4 of the Agreement on Agriculture and the Nairobi Ministerial Decision. The impact of the 
programme on trade is expected to be minimal.  
 
D. Support For Livestock Products  
1. Title of the subsidy programme  
 
Calf Breeding Sta bilization Schedule . 
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objective and/or purpose of the subsidy  
 
To improve the competitiveness and income of Hanwoo farmhouses  by cutting down production 
costs.  
 
4. Background and authority for the subsidy  
 
Law: Livestock Act  (Article 3 and Article 32). 
 
Authority: Ministry of Agriculture, Food and Rural Affairs.  
 
5. Form of the subsidy  
 
Grants.  
 G/SCM/N/343/KOR  
 
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  6. Recipients and terms  
 
Recipients : Cow raising farmers who joined the Calf Breeding Stabilization Schedule . 
 
Contents of the subsid y: Support is provided to compensate for the loss in case the average market 
price of calf is lower than the standard price of the schedule . 
 
7. Amount of the subsidy  
(Unit: million KRW)  
Type  2017  2018  
Lump sum transfer  452 376 
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
The impact of the programme on trade is expected to be minimal because the purpose of the 
programme is to stabilize the income of farmers.  
 
II. FORESTRY  
A. Wood Utilization  Assistance Programme  
1. Title of the subsidy programme   
 
Wood  Utilization Assistance Programme . 
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objectives and /or purpose of the subsidy  
 
To support development of the timber industry related to wood use and processing, and to improve 
productivity by replacing aging facilities.  
 
4. Background and authority for the subsidy  
 
Law: Act on the Promotion of  Forestry and Mountain  Villages (Article  10). 
 
Authority:  Korea Forest Service.  
 
5. Form of the subsidy  
 
Loans. 
 
Source of funding : Special Account for Structural Improvement of Rural Areas . 
 
6. Recipient and term s 
 
Recipient s: Wood manufacturers . 
 
Conditions : Interest rate of 3.0% or variable interest rate.  
 
Terms of the loan: 10 years (7 -year repayment period with a 3 -year grace period) . 
 G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer (a)  - - 
Loan 3,665  1,320  
Benefit of loan*  (b) 59 21 
Total (a+b)  59 21 
* The subsidy  effect is estimated based on the difference between the loan rate and the market rate.  
 
8. Duration of the subsidy  
 
No fixed time period . 
 
9. Trade effects of the subsidy  
 
Most of the products are  used to meet domestic demand. Therefore, t he effect on trade is presumed 
to be insignifican t. 
 
III. FISHERIES  
A. Support for Management of Fisheries  
1. Title of the subsidy programme  
 
Support for Management of Fisheries.  
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objectives and /or purpose of the subsidy  
 
To support fishermen including aquaculture farmers suffering from worsened business conditions 
such as disasters like typhoons and high water temperatures, by relieving financial burdens and 
maintaining stable management.  
 
4. Background and authority for the subsidy  
 
Law: Fisheries Act  (Article 8 6). 
 
Authority:  Ministry of Oceans and Fisheries . 
 
5. Form of the subsidy  
 
Loans. 
 
6. Recipient s and terms  
 
Recipient s: Fishermen duly holding a license, permit, or have submitted a report under the relevant 
fisheries legislation.  
 
Terms: Priority for fishermen and artisanal fishers participating in self -managed fisheries pilot 
project. Restrictions in eligibility if punished for violating relevant laws.  
 G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer ( a) - - 
Loan 2,045,749  2,135,931  
Benefit of loan* ( b) 59,573  55,033  
Total ( a+b) 59,573  55,033  
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.  
 
8. Duration of the subsidy  
 
No fixed time period . 
 
9. Trade effects of the subsidy  
 
It is not possible to estimate the impact on trade, because the programme is not trade -conditioned 
and beneficiaries may decide to sell the products either in the export market or the domesti c market 
at their discretion. In addition, it is assumed that most of the catches will be consumed in the 
domestic market and thus the impact on trade will be negligible . 
 
B. Support  for Aquaculture  Fishery  Development  
1. Title of the subsidy programme  
 
Support for Aquaculture Fishery Development.  
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objectives and/or purpose of the subsidy  
 
To ensure a stable supply of fishery products by supporting the development of aquaculture fishery 
in the c ontext of changing circumstances in the production environment for domestic and overseas 
fisheries . 
 
4. Background and authority for the subsidy  
 
Law: Fisheries Act (Article 86).  
 
Authority: Ministry of Oceans and Fisheries.  
 
5. Form of the subsidy  
 
Grant s and loan s. 
 
6. Recipient s and terms  
 
Recipient s: Aquaculture fishermen.  
 
Terms of the grant:  20% to 30% of business expenses.  
 
Terms of the loan: 2 years loan at an annual interest rate of 3% . 
 G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer ( a) 19,917  19,955  
Loan 2,800  2,800  
Benefit of loan* ( b) 22 22 
Total ( a+b) 19,939  19,977  
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
It is difficult  to estimate the effect on trade  because the programme is not trade -conditioned.  
 
C. Support for Vessel Decommissioning  
1. Title of the subsidy programme  
 
Support for Vessel Decommissioning.  
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objectives and /or purpose of the subsidy  
 
To reduce coastal fleet size to the level appropriate for fishery resources in order to protect fish 
stocks and promote sustainable fisheries.  
 
4. Background and authority for the subsidy  
 
Law: Act on Structural Improvements and Support for Domestic Fisheries (Article 13 and  14). 
 
Authority:  Ministry of Oceans and Fisheries and local governments.  
 
5. Form of the subsidy  
 
Grants. 
 
6. Recipient s and terms  
 
Recipient s: Coastal and offshore fishermen.  
 
Terms of  the grant:  Offshore fishing vessel decommissioning (government support 100%), coastal 
state fishing vessel decommissioning (government support 80% and provincial support 20%) . 
 
7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer ( a) 22,332  19,328  
Loan - - 
Benefit of loan  (b) - - 
Total (a+b)  22,332  19,328  
 
8. Duration of the subsidy  
 
The subsid y will continue provisionally until 20 23. 
 G/SCM/N/343/KOR  
 
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  9. Trade effects of the subsidy  
 
None 
 
D. Support for Manage ment  of Overseas Fisheries  
1. Title of the subsidy programme  
Support for Management of Overseas  Fisheries. 
 
2. Period covered by the notification  
2017-2018. 
 
3. Policy objectives and /or purpose of the subsidy  
 
Support for the management of overseas fishing, including international joint -ventures and 
aquaculture, to ensure stable supply and demand of fishery products.  
 
4. Background and authority for the subsidy  
 
Law: Distant Water Fisheries Development Act (Article 26).  
 
Authority:  Ministry of Oceans and Fisheries.  
 
5. Form of the subsidy  
 
Grants . 
 
6. Recipient s and terms  
 
Recipient s: Distant water fishermen . 
 
Terms of  the loan:  Restrictions for eligibility by operators who have been punished with suspension 
of fishing above a certain level for violation of compliance with the rules under the Distant Water 
Fisheries Development Act, including the conservation and management measures by coastal sta tes 
and regional fisheries management organizations (RFMOs).  
 
7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer ( a) 977 1,044  
Loan - - 
Benefit of loan ( b) - - 
Total ( a+b) 977 1,044  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
It is difficult to estimate the impact on trade, because the programme is not trade -conditioned.  
 
E. Support  for Fisheries Resources Management  
1. Title of the subsidy programme  
 
Support for Fisheries Resources Management.  
 G/SCM/N/343/KOR  
 
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  2. Period covered by the notification  
 
2017-2018. 
3. Policy objectives and /or purpose of the subsidy  
 
To ensure sustainable use and conservation of fisheries resources and foster increased scientific and 
technical knowledge for resource management including self -management in fisheries. It includes 
sea reforestation projects, developing marine ranches, marine forests and artificial reefs as well as 
implementation of resource management and restoration measures such as TAC and self -
management in fisheries.  
 
4. Background and authority for the subsidy  
 
Law: Fishery Resources Management Act, Fisheries Act.  
 
Authority:  Ministry of Oceans and Fisheries.  
 
5. Form of the subsidy  
 
Grants, Loan s. 
 
6. Recipient s and terms  
 
Recipient s: National and private institutes including National Institute of Fisheries Science (NIFS), 
fishermen and fishing communities involved in fisheries management (TAC, self -management in 
fisheries, etc.) . 
 
7. Amount of the subsidy  
(Unit:  million KRW)  
 2017  2018  
Lump sum transfer ( a) 122,975  127,468  
Loan 9,174  8,274  
Benefit of loan* ( b) - - 
Total ( a+b)* 132,149  135,742  
* The benefit of loan is under process of estimation and is to be updated . 
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
It is difficult  to estimate the effect on trade  because the programme is not trade -conditioned.  
 
F. Support  for Modernization of Old Distant -Fishing Vesse ls 
1. Title of the subsidy programme  
 
Support for Replacement  of Old Distant -Fishing Vessels and Modernization of Facilities.  
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objectives and /or purpose of the subsidy  
 
To ensure navigational safety for promotion of sustainable fishing activities and protection of crew 
life through replacement of old distant -water fishing vessels.  
 G/SCM/N/343/KOR  
 
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  4. Background and authority for the subsidy  
 
Law: Distant Water Fisheries Development Act (Article 26).  
Authority:  Ministry of Oceans and Fisheries.  
 
5. Form of the subsidy  
 
Loans. 
 
6. Recipient s and terms  
 
Recipient s: Distant water fishermen . 
 
Terms of the loan: 5-year grace period and 10 -year repayment at an annual interest rate of  3%. 
 
Restrictions on the operator of his/her eligibility for support when he/she has been suspended from 
fishing at or above a certain level by violating any rule prescribed in the Distant Water Fisheries 
Development Act.  
 
7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer ( a) - - 
Loan 2,700  2,430  
Benefit of loan* ( b) - - 
Total ( a+b) - - 
* The actual execution amount for Replacement of Old Distant Fishing Vessels for 2017 -2018 is 0 
KRW. The Loans for the Modernization of Facilities in 2017 and 2018 account for 1,300 million KRW 
and 800 million KRW respectively, and the actual benefits are in the process of being estimated and 
to be updated.  
 
8. Duration of the subsidy  
 
The actual execution amount of Replacement of Old Distant Fishing Vessels for 2017 -2018 is 0 KRW, 
and it has been discontinued since 2019.  
 
9. Trade effects of the subsidy  
 
It is difficult  to estimate the effect on trade  because the programme is not trade -conditioned.  
 
IV. ENERGY  INDUSTRY  
A. Coal Industry Support  
1. Title of the subsidy programme  
 
Coal Industry Support in the Special Accounting for Energy and Resource.  
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objectives and /or purpose of the subsidy  
 
- To stabilize the price of coal and briquettes in order to p rotect the livelihoods of people and 
ensure a stable supply and demand of coal.  
- To compensate for the difference between the production cost and sale price of coal and 
briquettes following the notification of a sale price ceiling.  
 G/SCM/N/343/KOR  
 
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  4. Background and author ity for the subsidy  
 
Laws: Price Stabilization Act  (Article 2) . 
 Coal Industry Act (Article 29).  
Authority:  Ministry of Trade, Industry & Energy.  
 
5. Form of the subsidy  
 
Grants.  
 
6. Recipient s and term s 
 
The subsidy is provided to coal mine operator s, briquette manufacturer s, and co al miners in the 
form of worker's compensation insur ance, support for briquette manufacturing cost s and educational 
expenses.  
 
7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer (a)  175,915  151,781  
Loan - - 
Benefit of loan * (b) - - 
Total (a+b)  175,915  151,781  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
V. MANUFACTURING INDUST RY 
A. Tariff Reduction on Aircraft Parts  
1. Title of the subsidy programme  
 
Tariff Reduction on Aircraft Parts . 
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objective and/or purpose of the subsidy  
 
To reduce production costs by encourag ing the importation of aircraft parts  which  are not produced 
domestically.  
 
4. Background and authority for the subsidy  
 
Law: Customs Act (Article 89 ). 
 
Authority:  Ministry of Economy and Finance.  
 
5. Form of the subsidy  
 
Tariff reduction . 
 
6. Recipients and terms  
 
Those designated as aircraft manufacturers or repai rers in accordance with the Promotion Act for 
the Development of Aircrafts and Space Industries.  
 G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2017 2018 
Lump sum transfer (a)  114,328  117,012  
Loan - - 
Benefit of loan  (b) - - 
Total (a+b)  114,328  117,012  
 
8. Duration of the subsidy  
 
For business es (reduction rate applied) . 
 
- Products listed in the Annex to the Agreement on Trade in Civil Aircraft : 100%  
(1 May 2019- 2021) → 80% (20 22) → 60% (202 3) → 40% (202 4) → 20% (202 5). 
- Other aircraft parts: 90% (1 May 2019~) → 80% (20 20) → 70% (202 1) → 60% (202 2) 
50% (2023) → 40% (2024) → 20% (2025) . 
 
For SMEs:  100%  
 
9. Trade effects of the subsidy  
 
The tariff reduction  is aimed at promoting importation of parts of aircraft and therefore there  is no 
effect on trade.  
 
B. Support for Farm Machinery Manufacturing  
1. Title of the subsidy programme  
 
Support for Farm Machinery Manufacturing.  
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objective and/or purpose of the subsidy  
 
To assist off -season manufacturing of farm machinery and to help machinery  manufacturers meet 
the high  demand for farm machinery in the  farming seasons.  
 
To promote the manufactu ring and supply of high -quality agricultural machinery made in  Korea , by 
providing financial resources for establishing production facilities of machinery required for 
automatization and modernization of agricultural facilities and machinery . 
 
4. Backgroun d and authority for the subsidy  
 
Law: Farm Mechanization Promotion Law  (Article 4).  
Authority:  Ministry of Agriculture, Food and Rural Affairs.  
 
5. Form of the subsidy  
 
Loans. 
 
6. Recipients and terms  
 
Recipients : Farm machinery manufacturers and developers of new -tech machinery.  
Content of the Subsidy:  To provide financial assistance for producing agricultural machinery and for 
establishing and constructing agricultural machinery production facilities.  G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
Its effect on trade is expected to be almost non -existent since the amount of the subsidy accounts 
for only 0.1% of the total value of farm machinery production.  
 
VI. ENVIRONMENT, RESEARC H AND DEVELOP MENT  
A. Environmental Improvement Loan Programme  
1. Title of the subsidy programme  
 
Environmental Improvement Loan Programme.  
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objectives and /or purpose of the subsidy  
 
To grant private loans at lower interest rates to small and medium businesses for investment in 
environmental improvements such as installing pollution prevention facilities with an aim to promote 
environmental protection.  
 
4. Background and authority for the subsidy  
 
Law: Framework A ct on Environmental Policy (Article 56). 
Authority:  Ministry of Environment.  
 
5. Form of the subsidy  
 
Loans. 
 
Source of funding: Commercial banks (Korea Development Bank).  
 
6. Recipient s and terms  
 
Recipient s: Firms that install and operate pollution prevention devices and facilities.  
Terms of the loan:  4-year equal repayment period with a 3 -year grace period  (maximum 
5 billion  KRW) . 
 Type  2017  2018  
Direct subsidy (a)  - - 
Loan 190,287 177,171 
Benefit of loan* (b)  986 1,423 
Total (a+b)  986 1,423 G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer ( a) - - 
Loan 62,000  56,873  
Benefit of loan * (b) 1,234  995 
Total ( a+b) 1,234  995 
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
None.  
 
B. Support for R&D of Environmental Technology Development Projects  
 
1. Title of the subsidy programme  
 
Support for R&D of Environmental Technology Development Projects . 
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objectives and /or purpose of the subsidy  
 
To improve the environment in Korea by developing cutting -edge environmental technology.  
 
4. Background and authority for the subsidy  
 
Law: Environmental Technology and Industry Support Act (A rticle 5). 
Authority:  Ministry of Environment.  
 
5. Form of the subsidy  
 
Grants.  
 
Source of funding:   Special Account for Environmental Improvement.  
 
6. Recipient s and terms  
 
Recipient s: Government -invested research institutions, universities, research institutions and 
private enterprises that participate in the Environmental Technology Development Project.  
 
7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer  (a) 178,479  212,974  
Loan - - 
Benefit of loan  (b) - - 
Total (a+b)  178,479  212,974  G/SCM/N/343/KOR  
 
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  8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
The effect on trade is minimal because the programme is focused on support for R&D of fundamental 
technology in order to improve the environment.  
 
C. Emission Reduction Project for In-use Diesel Vehicles  
1. Title of the subsidy programme  
 
Emission Reduction Project for In -use Diesel Vehicles.  
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objectives and /or purpose of the subsidy  
 
To improve air quality across the nation.  
 
4. Background and authority for the subsidy  
 
Laws:  Special Act on Metropolitan Air Quality Improvement (Paragraph 6 of Article  25 and 
Article  27); 
 
Clean Air Conservation Act (Paragraph 3 of Article 58) . 
 
Authority : Ministry of Environment.  
 
5. Form of the subsidy  
 
Grants.  
 
Source of funding:  Special Account for Environmental Improvement.  
 
6. Recipient s and terms  
 
Recipient s: 
 
- Diesel vehicles that fail the emission test on designated diesel vehicles* under Paragraph 1 of 
Article 25 of the Special Act on Metropolitan Air Quality Improvement.  
- Diesel vehicles other than designated diesel vehicles* that fail the emission test on in -use 
automobiles under  Article 57 of the Clean Air Conservation Act.  
- Diesel vehicles with expired exhaust gas guarantee period that fail the emission test on 
manufactured vehicles.  
*Designated diesel vehicles: diesel vehicles designated by the Special Act on Metropolitan Air Qu ality 
Improvement.  
Terms:  
 
- To support part of the costs (90%) of installing emission reduction devices and retrofitting with 
"cleaner" engines, and to compensate the remaining value (100%) of the vehicles for early 
scrapping.  
- 50% each from central governme nt and local government expenditures.  
 G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer ( a) 109,433  165,391  
Loan - - 
Benefit of loan  (b) - - 
Total (a+b)  109,433  165,391  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
This subsidy provides the total cost for a  diesel vehicle owner who installs emission reduction 
devices , retrofits with "cleaner" engines or early scrapping.  Therefore, it does not differentiate 
between a domestic and an impor ted device, which means that it does not result in a discriminatory 
trade barrier . 
 
D. Natural Gas Bus Supply Project  
1. Title of the subsidy programme  
 
Subsidy for Natural Gas Vehicle Procurement and Fuel Expenses.  
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objectives and /or purpose of the subsidy  
 
To replace frequently -operated and high -exhaust diesel engine buses and garbage trucks  with low-
emission and cleaner vehicles in order to expedite the amelioration of air qualit y in metropolitan 
areas.  
 
4. Background and authority for the subsidy  
 
Law: Clean Air Conservation Act (A rticle 58). 
 
Authority:  Ministry of Environment.  
 
5. Form of the subsidy  
 
Grants.  
 
Source of funding:   Special Account for Environmental Improvement.  
 
6. Recipient s and terms  
 
Recipient s: 
- In accordance with the Clean Air Conservation Act, grants for natural gas vehicle procurement 
are provided to persons who purchase natural gas vehicles.  
- In accordance with the Clean Air Conservation Act, grants for fuel expenses are provided to 
persons who intend to supply natural gas for vehicles that use natural gas as fuel.  
Terms:  Subsidized by local government (50%, matching fund) . 
 G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer  (a) 15,035  19,298  
Loan   
Benefit of loan  (b)   
Total (a+b)  15,035  19,298  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
The effect of the subsidy on trade is expected to be insignificant since it is intended to support 
purchasers of natural gas buses and garbage trucks, without differentiation between domestic and 
imported vehicles, as well as natural gas suppliers to those vehicles, for the improvement of air 
quality in metr opolitan areas.  
 
E. Hydrogen Fuel Cell Vehicle Distribution  
1. Title of the subsidy programme  
 
Hydrogen Fuel Cell Vehicle Distribution.  
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objectives and /or purpose of the subsidy  
 
To reduce air pollution.  
 
4. Background and authority for the subsidy  
 
Law: Clean Air Conservation Act (A rticle 58). 
Authority:  Ministry of Environment.  
 
5. Form of the subsidy  
 
Grants.  
 
6. Recipient s and terms  
 
Recipient s: 
 
- Persons who purchase hydrogen fuel cell vehicles or hydrogen buses.  
- Local authorities or private enterprises who install hydrogen refill stations.  
Terms : 
 
- Hydrogen fuel cell vehicles: 22.5 million KRW.  
- Hydrogen buses: 200 million KRW.  
- Hydrogen refill stations: 1,500 million KRW . 
 G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer  (a) 11,627  31,688  
Loan   
Benefit of loan  (b)   
Total (a+b)  11,627  31,688  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
None.  
 
F. Loan Programme  for Recycling Industry Promotion  
1. Title of the subsidy programme  
 
Loan Programme for Recycling Industry Promotion.  
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objectives and /or purpose of the subsidy  
 
To pro vide small recycling  businesses with long-term and low interest rate loans  for recycling facility 
installation and stable business operation with an aim to foster the recycling industry and prom ote 
resource  recovery from wastes.  
 
4. Background and authorit y for the subsidy  
 
Law: Act on the Promotion of Saving and Recycling of Resources  (Article 31 ). 
Authority:  Ministry of Environment.  
 
5. Form of the subsidy  
 
Loans. 
 
6. Recipient s and terms  
 
Recipient s: 
 
Recycling business o perators specified in Article 31 of  the Act on the Promotion of Saving and 
Recycling of Resources : 
 
- a business to install recycling facilities;  
- a resource recycling business conducted by the operators of designated recycling businesses and 
designated by -product discharging businesses;  
- a business to build a recycling complex;  
- a recycling business conducted by those who have obtained permission for intermediate waste 
disposal business or general waste disposal business; and  
- a business of research and technical deve lopment to facilitate recycling of resources.  G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer ( a)   
Loan 132,936  128,365  
Benefit of loan* ( b) 2,645  2,246  
Total ( a+b) 2,645  2,246  
* The benefit of loan is estimated based on the difference between the loan rate and the market rate.  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
None. 
 
G. Support for Telemetering Systems  
1. Title of the subsidy programme  
 
Subsidy for the Costs of Installation and Management of Telemetering Systems.  
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objectives and /or purpose of the subsidy  
 
To support the costs of the installation and management of metering systems installed and managed 
for the purpose of improving air quality through constant metering of air pollutants emitted from 
business sites.  
 
4. Background and authority for the subsidy  
 
Law: Clean Air Conservation Act (A rticle 81). 
Authority:  Ministry of Environment.  
 
5. Form of the subsidy  
 
Grants.  
 
Source of funding:  Special Account for Environmental Improvement.  
 
6. Recipient s and term s 
 
Recipient s: SMEs under Article 3 of the Enforcement Decree of the Framework Act on Small and 
Medium Enterprises that have installed metering devices in accordance with the regulations of Article 
32 of the Clean Air Conservation Act and Article 16 of the Special Act on Metropolitan Air Quality 
Improvement, and whose business sites transmit the metered results to a Clean SYS co ntrol centre.  
 
Terms:  Support for the costs of installation and management of Telemetering systems (40% from 
the central government and 20% from the local government).  G/SCM/N/343/KOR  
 
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  7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer (a)  2,062  1,070  
Loan   
Benefit of loan  (b)   
Total (a+b)  2,062  1,070  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsidy  
 
None.  
 
H. Project on the Distribution of Low NOX Burners  
1. Title of the subsidy programme  
 
Project for the Support for Low NOX Burner Installation.  
 
2. Period covered by the notification  
 
2017-2018.  
 
3. Policy objectives and /or purpose of the subsidy  
 
To support the installation of low NOX burners at small and medium business sites with an aim to 
improve air quality in areas of high concern in metropolitan and rural areas.  
 
4. Background and authority for the subsidy  
 
Laws:  
 
- Clean Air Conservation Act ( Paragraph 3 of Article  26). 
- Act on the Budgeting and Management of Subsidies.  
- Notifications No. 2009 -13 (Subsidy project to support low NOX burner installation, delegated 
affairs*) and No. 2009 -26 (Subsidy project under the Ministry of Environment, delegated 
affairs*) of the Ministry of Envir onment.  
*Delegated affairs: affairs entrusted to local governments.  
 
Authority:  Ministry of Environment.  
 
5. Form of the subsidy  
 
Grants.  
 
Source of fund ing: Special Account for Environmental Improvement.  
 
6. Recipient s and term s 
 
Recipient s: SMEs under Article 3 of the Enforcement Decree of the Framework Act on Small and 
Medium Enterprises, non -profit corporations, commercial buildings and apartment houses (with  the 
exception of public facilities) replacing regular burners with low NOX burners on regular  boilers, 
water chillers/heaters and drying facilities (limited to indirect heating facilities).  
 G/SCM/N/343/KOR  
 
- 23 - 
 
  Terms: Fixed support according to volume (local governments provide additional support equal to 
40% of the central government's support).  
 
*From 2015, new and  replaced boilers that burn gas or light oils (e.g. diesel, kerosene) with a 
capacity over 2  tons were excluded.  
 
7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer  (a) 8,246  8,246  
Loan   
Benefit of loan  (b)   
Total (a+b)  8,246  8,246  
 
8. Duration of the subsidy  
 
No fixed time period.  
 
9. Trade effects of the subsid y 
 
None 
 
I. Development of Core Technology in Industrial Fields  
1. Title of the subsidy programme  
 
Development of Core Technology in Industrial Fields . 
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objectives and /or purpose of the subsidy  
 
To support the development of bottleneck technologies that occur due to rapid changes in the 
industrial environment, and to discover and validate promising core technologies for the upcoming 
future.  
 
4. Background and authority for the subsidy  
 
Law: Industrial Technology Innovation Promotion Act . 
Authority:  Ministry of Trade, Industry, and Energy.  
 
5. Form of the subsidy  
 
Government Contribution.  
6. Recipient s and term s 
 
Recipients:  Small and medium -sized businesses, universities, and research institutes.  
Terms:  Subsidize for 1~2years, 500 million KRW per year.  
 
7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer (a)  16,746  10,574  
Loan   
Benefit of loan  (b)   
Total (a+b)  16,746  10,574  
 G/SCM/N/343/KOR  
 
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  8. Duration of the subsidy  
 
Until 2019.  
 
9. Trade effects of the subsidy  
 
None 
 
J. Loan Programme for R&D of information and Communication Technology  
1. Title of the subsidy programme  
 
Loan Programme for R&D of Information and Communication  Technology . 
 
2. Period covered by the notification  
 
2017-2018. 
 
3. Policy objectives and /or purpose of the subsidy  
 
To alleviate excessive risk s and burden s that companies face when developing technologies by 
providing loan s for large -scale R&D projects in the field of information and communications.  
 
4. Background and authority for the subsidy  
 
Law: Information and Communications Technology Industry Promotion A ct. 
Authority:  Ministry of Science  and ICT. 
 
5. Form of the subsidy  
 
Financing ( Loans ). 
 
6. Recipient s and term s 
 
Recipients:  Small and medium sized companies (private).  
Terms:  Interest rate to be adjusted according to market interest rate.  
7. Amount of the subsidy  
(Unit: million KRW)  
 2017  2018  
Lump sum transfer (a)    
Loan 40,000  35,000  
Benefit of loan*  (b)   
Total (a+b)    
* The subsidy effect is estimated based on the difference between the loan rate and the market rate.  
 
8. Duration of the subsidy  
 
No fixed time period . 
 
9. Trade effects of the subsidy  
 
None.  
 
 
__________